Government set to implement comprehensive redesign of E-Levy

Government through the Ministry of Finance is seeking to comprehensively redesign the controversial Electronic Transfer Levy (E-Levy).

According to a myjoyonline.com report, the move forms part of government’s Medium Term Revenue Strategy seeking to revamp and optimize the taxation policy for much better effectiveness and efficiency.

The portal added that the comprehensive redesign of the E-Levy could depict a rather forward-thinking approach to taxation in line with the digital age.

It added that government will adopt the redesigned taxation policy to boost its revenue generation efforts while broadening the domestic tax base to support key sectors of the economy.

Government in May 2022, introduced the controversial E-Levy which imposed a 1.5 percent charge on electronic transfers including mobile money, bank transfers and among others. The tax was widely criticized by the public amid an impasse in Parliament over its passage.

Meanwhile, the Medium Term Revenue Strategy outlines various other reforms including:

Broadening the withholding tax regime to cover various tax types to enhance taxpayer identification, facilitate efficient tax collection, and simplify filing processes, especially for incomes within the informal sector.

Measures to streamline tax returns and scrutinize the modified taxation system, aiming to reduce tax avoidance and encourage voluntary compliance.

A review of outdated tax categories such as stamp duty, income tax stamp, and vehicle income tax, with a focus on aligning them with current market dynamics.

Enhancing the taxation of rental income to ensure fairer contributions from this sector.

Implementation of taxation on Gross Gaming Revenue (GGR) for industry players and the introduction of withholding tax on winnings, marking a significant step towards a more comprehensive and equitable tax structure.

MA/NOQ

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